HSBC kicks off $1bn share buyback after profit smashes forecast
HSBC has resumed its share buyback programme after profit soared past expectations in the second quarter of 2026.
The FTSE 100 bank – whose market cap of £274bn makes it the London Stock Exchange’s most valuable company – posted $10.1bn (£7.5bn) in pre-tax profit for the last three months, surging past an internal forecast of £9.5bn. This was also up 60 per cent from the $6.3bn secured in the same period last year.
The profit haul came as revenue climbed 11 per cent to $37.7bn.
Net interest income climbed eight per cent to $18.2bn, as the bank re-invested lower-yielding hedges at current higher market interest rates, a strategy known as structural hedging. The group’s net interest margin – a key indicator of a bank’s profitability from lending – was up four basis points to 1.61 per cent.
Fee income, which is coveted by banks as a stable form of income due to its none-reliance on interest rates, increased nearly 10 per cent to $7.3bn.
This was driven by a bumper performance across wealth – a key area of focus for chief executive Georges Elhedery – which grew 20 per cent to $5.5bn.
HSBC restarts buybacks and ups cost-cutting target
HSBC said it would resume share buybacks with program of up to $1bn, set to be completed before the firm delivers its third quarter update.
The group had previously hit pause on buybacks following its move to privatise Hang Seng Bank in October 2025. The blue-chip giant offered to pay HK$155 per share for a 36 per cent stake not already owned by the bank, which valued the holding at HK$106.1bn (£10.7bn).
In the second quarter update, Elhedery raised the bank’s cost-cutting target for the end of 2026 to $2bn from the original $1.5bn, which the group said was achieved at the beginning of this year.
It expects to achieve this within the original restructuring budget of $1.8bn.
Elhedery took the helm at the bank just over two years ago and quickly began his remake of the group’s operations.
A key part of chief executive Georges Elhedery’s restructure has included splitting the business into “eastern” and “western” markets, covering the Asia-pacific and the Middle East and the Americas and Europe, respectively.
Total headcount across the group has dropped to 206,161, down 2,559 since the year-end of 2025. Morning Wire revealed last February the bank was set to axe a number of investment bankers on the same day allocated for bonus payouts.
Reports later confirmed that investment bankers at vice-president level and above received no bonus following termination.